Today we continue the ongoing series on author estate planning with a look at how to pass copyrights by means of a trust.
The language we look at here applies only to revocable trusts, meaning trusts established by a living person or persons (the “settlor” – in our case, an author and/or the author and his or her spouse) which can be canceled or modified during the settlor’s lifetime.
Irrevocable trusts operate under entirely different rules, and are not generally appropriate for standard estate planning purposes.
In most cases, a person (or married couple) establishes a trust in order to hold and manage assets. Trusts have many legal advantages (which vary somewhat by jurisdiction) but the primary one is avoiding probate proceedings.
A properly drafted and managed trust ensures that the settlor’s property does not go into probate after that person’s death. Instead, the property is managed and distributed by a trustee in accordance with the instructions written into the trust by its creator.
Step 1 for the Author is selecting the right Trustee.
With a will, the person named as executor (the person who handles administration and distribution of the author’s estate) will usually be acting with court supervision. However, the Trustee of a trust does not usually have any court (or other official) supervision, which makes selection of a Trustee a serious matter.
The settlor (creator) of a revocable trust typically serves as his or her own trustee throughout the settlor’s lifetime. The trust then names the person who will act as “Successor Trustee” upon the settlor’s death.
When selecting successor trustees, Authors need to ensure that the people named as successor trustee(s):
1. Are likely to survive the author. The trust estate won’t be distributed until after the author’s death. The law permits naming multiple successor trustees, as well as the order in which they serve, so a backup is always a good idea.
2. Have sufficient business acumen to handle transferring title to copyrights and other intellectual property. While this isn’t absolutely required, it makes the process easier and minimizes stress on the trustee.
3. Will have the mental clarity to administer the author’s estate. Selecting a relative is fine, but remember that close relatives often have trouble focusing on business during the grieving process. If you choose a relative as trustee, you may want to locate an experienced attorney to assist the trustee with the administration process. For an author’s estate, it helps if the attorney is familiar with intellectual property issues as well as estates and trusts.
Next week, we’ll look at different ways an author can order the trust itself to facilitate management and distribution of copyrights after death.
Have questions about trusts or author estate plans? Feel free to ask in the comments!
2 thoughts on “Who Can an Author Trust? (Trusts in Author Estate Planning, Part 1)”
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